Ku-ring-gai Council v Ichor Constructions Pty Ltd - [2018] NSWSC 610

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Ku-ring-gai Council v Ichor Constructions Pty Ltd [2018] NSWSC 610
Hearing dates: 24/04/2018
Date of orders: 08 May 2018
Decision date: 08 May 2018
Jurisdiction: Equity - Commercial Arbitration List
Before: McDougall J
Decision:
Summons dismissed with costs.

Catchwords:
COMMERCIAL ARBITRATION – consideration of s 27D of the Commercial Arbitration Act 2010 (NSW) – discussion of requirements for arbitrator to act as mediator – where arbitrator so acted – arbitrator’s mandate terminated pursuant to s 27D(6) absent subsequent written consent of the parties – whether such consent can be inferred from the written record of the transcript – such inference of consent impermissible – consequently no written consent provided.

COMMERCIAL ARBITRATION – statutory waiver – consideration of s 4 of the Commercial Arbitration Act 2010 (NSW) – whether first defendant waived its right to insist on written consent – s 4 requires actual knowledge of the provision which is to be waived – no such knowledge in present case – no waiver established.
EQUITY – whether first defendant estopped from insisting on written consent – no evidentiary basis for either conventional estoppel or estoppel by representation – no detriment suffered by plaintiff in any event – proceedings dismissed.
Legislation Cited: Commercial Arbitration Act 2010 (NSW)
UNCITRAL Model Law on International Commercial Arbitration 1985
Cases Cited: Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570
Hopeshore Pty Ltd v Melroad Equipment Pty Ltd (2004) 212 ALR 66
Overmyer Industrial Brokers Pty Ltd v Campbells Cash and Carry Pty Ltd [2003] NSWCA 305
Texts Cited: Australian Oxford Dictionary
Commercial Arbitration in Australia (LawBook Co, 2nd edition, 2013)
Macquarie Dictionary
Report of the 18th Session of the United Nations Commision on International Trade Law
Category: Principal judgment
Parties: Ku-ring-gai Council (Plaintiff)
Ichor Constructions Pty Ltd (First Defendant)
John Tyrril (Second Defendant)
Representation:
Counsel:
Dr CJ Birch SC (Plaintiff)
M A Ashhurst SC / L D Corbett (Defendants)
Solicitors:
HWL Ebsworth (Plaintiff)
BCP Lawyers & Consultants (First Defendant)

File Number(s): 2018/110112

Judgment

HIS HONOUR: Section 27D(1) of the Commercial Arbitration Act 2010 (NSW) (the Act) provides that on certain conditions, an arbitrator may act as a mediator in arbitration proceedings before him or her. Section 27D(4) provides that an arbitrator who has acted as a mediator may not thereafter conduct arbitration proceedings in relation to the dispute unless the parties, on or after termination of the mediation, give their written consents.
In this case, the second defendant (the Arbitrator) was an arbitrator hearing a dispute between the plaintiff (the Council) and the first defendant (Ichor). Ichor says that in the course of that arbitration, the Arbitrator acted (with the prior written consent of the parties) as a mediator, and that thereafter, he resumed the conduct of the arbitration without the parties’ written consents that s 27D(4) requires. The Council contends that the Arbitrator was entitled to proceed with the arbitration once the mediation terminated. Its summons seeks relief accordingly.
The essential…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2018] NSWSC 610
Decision Date: 08 May 2018

CaseChat Overview and Summary

In the case of Ku-ring-gai Council v Ichor Constructions Pty Ltd, the dispute arose from a commercial arbitration process under the Commercial Arbitration Act 2010 (NSW). The plaintiff, Ku-ring-gai Council, sought to enforce an arbitration award against the defendants, Ichor Constructions Pty Ltd and another party. The defendants contested the enforcement on the grounds that the arbitrator had acted as a mediator without their written consent, as required by the Act. The case was heard in the Supreme Court of New South Wales, Equity Division.

The central legal issues before the court were whether the defendants had waived their right to insist on written consent from the arbitrator to act as a mediator and whether the defendants were estopped from enforcing the requirement of written consent. The court was required to determine if the defendants' conduct could be construed as a waiver under s 4 of the Act and if there was any basis for an equitable estoppel that would prevent the defendants from insisting on the written consent.

The court found that the defendants had not waived their right to require written consent for the arbitrator to act as a mediator, as the statutory waiver provision under s 4 of the Act required actual knowledge of the provision, which was absent in this case. Furthermore, the court held that there was no basis for an equitable estoppel against the defendants because there was no evidentiary basis for either conventional estoppel or estoppel by representation, and the plaintiff had not suffered any detriment. Consequently, the defendants were not estopped from insisting on the written consent. As a result, the proceedings were dismissed, and the defendants' challenge to the enforcement of the arbitration award was unsuccessful.

The final orders of the court were that the defendants' application to set aside the arbitration award was dismissed with costs. This outcome reinforced the importance of strict compliance with statutory requirements in commercial arbitration proceedings and the limited circumstances in which a party may be estopped from enforcing such requirements.

Orders